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New Kensington-Arnold School Board expects to cut costs with bond refinancing

[February 21, 2013]

New Kensington-Arnold School Board expects to cut costs with bond refinancing

Feb 21, 2013 (The Valley News-Dispatch - McClatchy-Tribune Information Services via COMTEX) --
The New Kensington-Arnold School Board will refinance some existing bonds to save money but decided not to add debt.

The board on Wednesday agreed to refinance $6 million in bonds that were issued in 2008.

Chris Brewer, the district's bond counsel from the firm Dinsmore & Shohl, said the district is expected to save about $500,000 this school year and $100,000 next school year. After that, annual debt service will remain the same at about $2 million per year.

The savings stems from refinancing at lower interest rates, which Brewer said are expected to begin rising soon.

The district's investment banker, Joseph Muscatello from the firm Boenning & Scattergood, also had run estimates in case the board chose to package the refinanced bonds with new debt.

He'd projected the district would pay an additional $60,000 per year if it borrowed another $2 million. Annual debt payments would increase by about $116,000 if the district borrowed $3.5 million.

Superintendent John Pallone said board members opted to avoid assuming new debt because they don't think they'll need it for the capital projects they have planned.

Capital projects
The board agreed to seek bids or quotes from contractors for more than a dozen facility improvements, including:
--Repairing the tennis courts; reconditioning the ball fields; replacing a gym dividing curtain; replacing shower valves in high school locker rooms; replacing high school stage curtains.

Pallone said they expect all of those projects will total less than $500,000.

The board hopes the savings from the refinancing will cover the projects' costs.

Pallone said the district also is considering other capital projects, such as replacing the outdated phone system.

The board approved an amended contract with its telephone service provider, Consolidated Communications, to upgrade service at a cost of $1,800 per month. That's an increase of less than $100 per month.

Pallone said the district plans to switch over to an Internet-based phone system. The district is awaiting bids from contractors to replace all of the buildings' classroom and office phone equipment.

Not only are the changes expected to improve landline service, but Pallone said they will upgrade the public-address system and provide an application that will allow "smart" cellphones to tap into the phone system. The latter will be especially advantageous on the high school property, where there is limited cellphone reception.

Liz Hayes is a staff writer for Trib Total Media. She can be reached at 724-226-4680 or lhayes@tribweb.com.